It took years to convince the Ontario provincial government to support and then expand cost of production farm risk management programs. Now enrollment in the grains and oilseeds' version is dropping
Numbers from Agricorp, the provincial crown corporation that runs the program for Ontario's grains and oilseeds farmers, show farmers' interest in the RMP is dwindling. In 2010, only 5,900 enrolled in the program, a drop of more than half from the 12,200 that enrolled when the pilot was first launched in 2007.
Do you plan to enroll in this program or will you opt out? Why?
Comments
To have enrolled in the 2010 extension, I would have paid over $1,000 more in premiums than I was to get - a definite no brainer.
In addition, when I received my AgriStability cheque for 2009, the RMP payment I received for 2009 had been clawed back - I'm not enthralled about paying premiums into two programs, but getting the benefit from effectively only one.
RMP enrollment is dropping precisely because farmers have figured out what farm organizations haven't, and won't - it makes no sense to pay twice, but get benefits once.
As long as RMP is considered to be an advance on AgriStability, I doubt I'll ever go back into the RMP program, and I'm definitely not alone.
Exactly right. I was in RMP for the first year. I recieved about $6000. Great....well not really. That same calendar year I recieved a CAIS payment, less the $6000 RMP payment. OK, except Agricorp was expecting me to pay about $1000 for the next year RMP plus another $800 for the CAIS enrollment.
When I questioned them about this they explained "I couldn't expect to receive payments on two programs in the same year", but somehow it is alright to expect two premiums in one year.
Forget it....I'm out!
Well yeah. So the 2010 extension wasn't even announced until after the years prices were pretty well set and looking pretty good. Why insure something when you already have a pretty good idea that it's going to turn out good anyway? On top of the other problems with RMP.
as the girl at agri corp will do the math for you as you are on the phone and tell you if you are a paying or collecting one.I believe if you where real heavy corn rotation you got a minimum payment ,and soys,wheat was no payment just an enrollment fee,,we opted out
Let me preface this with the following - all farmers have the choice to opt in or out of RMP if they so choose, and I respect their freedom to make that choice.
In my view, RMP is effectively price insurance, with government backing in order to make it actuarially sound at a rate that farmers can afford to pay for the coverage if they so choose.
The price for commodities is strong right now, which reduces the need for price insurance is relatively low, so there is strong short-term logic in opting out today. Limited to the short-term, you are right, it is a no-brainer.
However, the long-term implications of a mass exit are not positive for the industry as a whole. A program that is not being subscribed to heavily is likely to face the chopping block when the political winds blow towards budget cutting and fiscal constraint. And I think that most agree that we will be heading back in that direction sooner rather than later. Even the NDP are on the page of balancing budgets.
When that day comes in the future when there is a long-term decline in prices (such as what happened in the period prior to the ethanol boom, and Agri-stability fails as a program) should any effort be made to help the farming community that chose to reject a risk management tool that dealt with that problem? Should an ad hoc program or emergency funding flow in this instance?
I fear that the long-term implications of the choice farmers are making on RMP will be negative. I also fear that this will not be limited to just Grains and Oilseeds, but will also be common for pork and cattle producers that will choose a few dollars in their pockets in the short-term over a long-term program to provide price insurance for their respective industries.
Instead of hand-wringing, and pontificating about what type of insurance RMP does, or does not, provide, why don't you come out of the woodwork and actually help rest of us try to correct the clawback problem?
The Province has shown in spades contempt towards farmers. RMP is about raising revenues for Queens Park coffers. It is not about farmers in the least.
I define anyone to find a single insurance company whereby clients pay for 2 premiums but can only claim once if the need arises.
Only a government agency can get away with that.
You imply that the current government will always call the shots in regards to our long-term needs.
When the day comes that commodity prices decline for an extended period, I can envision that a new, competent and knowledgeable Minister will be installed by then.
We should not be surprised that 5900 farmers still enroll out of 24000. If it is so good rmp more would sign up, so let us find what the problem is and fix it. Put all the imput expense cost lines in example land rent or better put in land per acre property taxes. If you have not got all the expense lines in rmp as other non farm business use , forget rmp and each farmer should self insure
There has been poor PR on the program by the designers as far as point blank how the program is designed giving free access.
RMP expenses include farm expenses including land rent and property taxes. The expense are an average of the most cost effective farmers, not of the highest prices paid. The RMP is designed to support farmers in long periods of low prices as seen in the past. In 2010 the program was extented for one year and participation was limited to those who had paid premuims to the program in the past. If a farmer feels he doesn't need price insurance then he is free to go on his own. For me I will choose to support my business with RMP insurance.
It's easy to sit back and criticize any program, but how about offering some solutions and even better getting involved when developing these programs. out renting your neighbor is not a solution.
The most-ironic problem with RMP is that is easy to criticize, and impossible to defend. How, for example, could anyone defend an insurance program designed so that in the year you really need it, (ie. the year you are also going to get a substantial AgriStability payment)your RMP premium and your RMP coverage are both going to completely disappear?
Or, to look at it from another way, how could anyone defend an insurance program designed so that in the year you really need it, you'd be absolutely better off without it?
The worst thing is that farm groups have known about this clawback problem for a long time, but have chosen to do absolutely nothing. If I remember correctly, about 14 months ago, the Ontario Federation of Agriculture (OFA) and the Grain Farmers of Ontario (GFO) saw resolutions passed by both boards of directors to ask that this clawback provision be ended, yet neither organization has done anything at all to pursue the matter.
Therefore, the solutions have long-since been offered, but farm groups have, once again, and not-surprisingly, completely dropped the ball.
Comments
To have enrolled in the 2010 extension, I would have paid over $1,000 more in premiums than I was to get - a definite no brainer.
In addition, when I received my AgriStability cheque for 2009, the RMP payment I received for 2009 had been clawed back - I'm not enthralled about paying premiums into two programs, but getting the benefit from effectively only one.
RMP enrollment is dropping precisely because farmers have figured out what farm organizations haven't, and won't - it makes no sense to pay twice, but get benefits once.
As long as RMP is considered to be an advance on AgriStability, I doubt I'll ever go back into the RMP program, and I'm definitely not alone.
Stephen Thompson, Clinton Ont.
Exactly right. I was in RMP for the first year. I recieved about $6000. Great....well not really. That same calendar year I recieved a CAIS payment, less the $6000 RMP payment. OK, except Agricorp was expecting me to pay about $1000 for the next year RMP plus another $800 for the CAIS enrollment.
When I questioned them about this they explained "I couldn't expect to receive payments on two programs in the same year", but somehow it is alright to expect two premiums in one year.
Forget it....I'm out!
Well yeah. So the 2010 extension wasn't even announced until after the years prices were pretty well set and looking pretty good. Why insure something when you already have a pretty good idea that it's going to turn out good anyway? On top of the other problems with RMP.
as the girl at agri corp will do the math for you as you are on the phone and tell you if you are a paying or collecting one.I believe if you where real heavy corn rotation you got a minimum payment ,and soys,wheat was no payment just an enrollment fee,,we opted out
Let me preface this with the following - all farmers have the choice to opt in or out of RMP if they so choose, and I respect their freedom to make that choice.
In my view, RMP is effectively price insurance, with government backing in order to make it actuarially sound at a rate that farmers can afford to pay for the coverage if they so choose.
The price for commodities is strong right now, which reduces the need for price insurance is relatively low, so there is strong short-term logic in opting out today. Limited to the short-term, you are right, it is a no-brainer.
However, the long-term implications of a mass exit are not positive for the industry as a whole. A program that is not being subscribed to heavily is likely to face the chopping block when the political winds blow towards budget cutting and fiscal constraint. And I think that most agree that we will be heading back in that direction sooner rather than later. Even the NDP are on the page of balancing budgets.
When that day comes in the future when there is a long-term decline in prices (such as what happened in the period prior to the ethanol boom, and Agri-stability fails as a program) should any effort be made to help the farming community that chose to reject a risk management tool that dealt with that problem? Should an ad hoc program or emergency funding flow in this instance?
I fear that the long-term implications of the choice farmers are making on RMP will be negative. I also fear that this will not be limited to just Grains and Oilseeds, but will also be common for pork and cattle producers that will choose a few dollars in their pockets in the short-term over a long-term program to provide price insurance for their respective industries.
Instead of hand-wringing, and pontificating about what type of insurance RMP does, or does not, provide, why don't you come out of the woodwork and actually help rest of us try to correct the clawback problem?
Stephen Thompson, Clinton ON
The Province has shown in spades contempt towards farmers. RMP is about raising revenues for Queens Park coffers. It is not about farmers in the least.
I define anyone to find a single insurance company whereby clients pay for 2 premiums but can only claim once if the need arises.
Only a government agency can get away with that.
You imply that the current government will always call the shots in regards to our long-term needs.
When the day comes that commodity prices decline for an extended period, I can envision that a new, competent and knowledgeable Minister will be installed by then.
rmp was started in 2002 by OCPA and others
hell no
We should not be surprised that 5900 farmers still enroll out of 24000. If it is so good rmp more would sign up, so let us find what the problem is and fix it. Put all the imput expense cost lines in example land rent or better put in land per acre property taxes. If you have not got all the expense lines in rmp as other non farm business use , forget rmp and each farmer should self insure
There has been poor PR on the program by the designers as far as point blank how the program is designed giving free access.
RMP expenses include farm expenses including land rent and property taxes. The expense are an average of the most cost effective farmers, not of the highest prices paid. The RMP is designed to support farmers in long periods of low prices as seen in the past. In 2010 the program was extented for one year and participation was limited to those who had paid premuims to the program in the past. If a farmer feels he doesn't need price insurance then he is free to go on his own. For me I will choose to support my business with RMP insurance.
Jeff
With tonight's Conservative majority, RMP is dead, dead, dead.
Why would anyone enrol in what will never be more than a flawed, 40% program?
Stephen Thompson, Clinton ON
The program is no more than a tax on production. Why should producers pay a premium when the americans do not.
Terry
It's easy to sit back and criticize any program, but how about offering some solutions and even better getting involved when developing these programs. out renting your neighbor is not a solution.
Hey, you want to pay 2 premiums for one policy, the more power to you.
And if someone wants to rent my ground at the going rate, that's my solution in utilizing my land.
I respect your decisions so show some courtesy and respect my decisions.
To each their own.
The most-ironic problem with RMP is that is easy to criticize, and impossible to defend. How, for example, could anyone defend an insurance program designed so that in the year you really need it, (ie. the year you are also going to get a substantial AgriStability payment)your RMP premium and your RMP coverage are both going to completely disappear?
Or, to look at it from another way, how could anyone defend an insurance program designed so that in the year you really need it, you'd be absolutely better off without it?
The worst thing is that farm groups have known about this clawback problem for a long time, but have chosen to do absolutely nothing. If I remember correctly, about 14 months ago, the Ontario Federation of Agriculture (OFA) and the Grain Farmers of Ontario (GFO) saw resolutions passed by both boards of directors to ask that this clawback provision be ended, yet neither organization has done anything at all to pursue the matter.
Therefore, the solutions have long-since been offered, but farm groups have, once again, and not-surprisingly, completely dropped the ball.
Stephen Thompson, Clinton ON
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